Not all commute time compensable under "continuous workday" rule

A 2nd Circuit decision may have finally quelled lingering questions about when the workday begins and ends for remote employees who commute to and from multiple worksites. Following a trend of recent decisions in this vein, the court ruled May 5 in Kuebel v. Black & Decker that just because an employee works from home, not all time spent commuting is compensable under the “continuous workday” rule.

The U.S. District Court for the Western District of New York had granted summary judgment in favor of Black & Decker (B&D) regarding the claim that an employee should be compensated for all time spent commuting. Under the continuous workday rule, a principle incorporated in DOL regulations, employers generally are required to pay employees for all time spent traveling after the workday has begun. The district court found that the tasks the plaintiff performed at home were not “integral and indispensable” to the principal job functions, could have been completed at any time during the day, and therefore did not extend the workday to include morning and evening commutes. The 2nd Circuit affirmed the decision, but on different grounds, holding that even if the work performed at home was integral and indispensable, this did not mean commute time should be compensable.

The ruling is noteworthy given the inconsistency of how courts have handled such commute time issues in the past (see “Dooling Cases”), according to Lawrence McGoldrick, of counsel at Fisher & Phillips. While most recent cases have seen similar results, significant strife remains. He points to Rutti v. Lojack Corp., in which a trial court originally granted summary judgment in favor of the employer on the employee’s claims that he should be compensated for commute time, but in 2010 the 9th Circuit reversed part of the ruling.

McGoldrick says in-house legal counsel and HR managers are struggling to deal with these types of Fair Labor Standards Act (FLSA) issues. “This is a particularly thorny issue because there’s inconsistent case law out there,” he explains. “The Lojack case shows how tricky this situation is. It’s a high-level court and they struggled with the decision, and later even issued a new decision that said, ‘Well, the employer wins most of the claims, but we’re going to carve out one of the claims—we changed our minds.’”

Kuebel’s Claims

Greg Kuebel was employed by B&D as a retail specialist from September 2006 to June 2007. His primary responsibilities were to ensure that B&D products were properly displayed, stocked and priced at six assigned Home Depot stores in his region. Kuebel was expected to spend five to eight hours per day completing these types of in-store activities. To track time worked, B&D issued him a PDA upon which he was to record entry and exit times at each store, which he would sync with B&D’s server. Additionally, he was required to record his time spent preparing for store visits. B&D compensated him for these tasks, as well as for time spent commuting to stores in excess of 60 minutes or 60 miles.

Kuebel argued that all time spent commuting from the first to last store was compensable under the FLSA and New York labor law because of the continuous workday rule. He claimed that his workday began with his morning preparatory tasks and that the workday ended when he completed his end-of-day tasks.

Lessons Learned

Although the 2nd Circuit ultimately found in favor of B&D, employers can learn from Kuebel, says Littler Mendelson Shareholder Lee Schreter. She shares three steps that can help companies avoid this type of litigation.

Schreter suggests that employers establish clearly communicated policies about what constitutes working time. As part of this, she says employers need to ensure their timekeeping systems are accurate and functional and provide employees with the opportunity to report work done outside the normal workday.

Next, Schreter implores employers to ensure their managers and employees are trained on their respective obligations under the state and federal wage laws. “Tell supervisors that if an employee performs work, even if they didn’t get advance permission, you’re generally going to have an obligation to pay them for that time,” she says. “It’s generally a good practice to pay the employee in those circumstances and then discipline them later for violating your rules.”

Finally, Schreter asserts that companies must get their managers to understand that they are the employer’s eyes and ears in the workplace. Just because an employee doesn’t report time worked doesn’t mean the managers should ignore it if they are aware it’s going unrecorded. “Sometimes [supervisors] have the misconception that it’s the employee’s responsibility to keep an accurate time record, so you have to educate them that that’s legally not the case,” she says. “Most supervisors will do the right thing, but sometimes they have misconceptions learned at other workplaces or from their time spent there nonexempt employees. Therefore, you have to make sure your managers understand the legal obligations.”